Legal Article - Employment Law

Redundancy payments

Any employee must complete 2 years service before being eligible for redundancy payments.

For each complete year of service up to a maximum of 20, an eligible employee should receive:

• For each year of service at age 18 or over, but under 22 - half a week’s pay
• For each year of service at age 22, but fewer than 41 - one week’s pay
• For each year of service at age 41, but fewer than 65 - one and one half week’s pay.

The above weekly pay figure is subject to a statutory maximum of £400 (from 01/02/11) and service is counted backwards from the date the redundancy takes effect.

The employer must give the employee a written statement showing how the payment has been calculated; at or before the time the redundancy takes effect. Where the employee works irregular hours then the redundancy payment is based on an average weekly payment for the twelve weeks prior to redundancy